Wages and Working Conditions

CEOs of multinational corporations, exotic dancers, and children with lemonade stands have at least one thing in common. They all expect a return for their effort. Most workers get that return in a subtle and ever-changing combination of money wages and working conditions. This article describes how they changed for the typical U.S. worker during the twentieth century.

Working Conditions

Surely the single most fundamental working condition is the chance of death on the job. In every society workers are killed or injured in the process of production. While occupational deaths are comparatively rare overall in the United States today, they still occur with some regularity in ocean fishing, the construction of giant bridges and skyscrapers, and a few other activities.

For all United States workers the number of fatalities per dollar of real (inflation-adjusted) GNP dropped by 96 percent between 1900 and 1979. Back in 1900 half of all worker deaths occurred in two industries—coal mining and railroading. But between 1900 and 1979 fatality rates per ton of coal mined and per ton-mile of freight carried fell by 97 percent.

This spectacular change in worker safety resulted from a combination of forces that include safer production technologies, union demands, improved medical procedures and antibiotics, workmen's compensation laws, and litigation. Ranking the individual importance of these factors is difficult and probably would mean little. Together, they reflected a growing conviction on the part of the American people that the economy was productive enough to afford such change. What's more, the United States made far more progress in the workplace than it did in the hospital. Even though inflation-adjusted medical expenditures tripled from 1950 to 1970 and increased by 74 percent from 1975 to 1988, the nation's death rate declined in neither period. But industry succeeded in lowering its death rate, both by spending to improve health on the job and by discovering, developing, and adopting ways to save lives.

Data for injuries are scarcer and less reliable, but they probably declined as well. Agriculture has one of the highest injury rates of any industry; the frequent cuts and bruises can become infected by the bacteria in barnyards and on animals. Moreover, work animals and machinery frequently injure farm workers. Since the proportion of farm workers in the total labor force fell from about 40 percent to 2 percent between 1900 and 1990, the U.S. worker injury rate would have fallen even if nothing else changed. The limited data on injuries in manufacturing also indicate a decline.

Another basic aspect of working conditions is exposure to the weather. In 1900 more than 80 percent of all workers farmed in open fields, maintained railroad rights of way, constructed or repaired buildings, or produced steel and chemicals. Their bosses may have been comfortably warm in the winter and cool in the summer, but the workers were not. A columnist of that era ironically described the good fortune of workers in Chicago steelworks, who could count on being warmed by the blast from the steel melt in freezing weather. Boys who pulled glass bottles from furnaces were similarly protected—when they didn't get burned. By 1990, in contrast, more than 80 percent of the labor force worked in places warmed in the winter and cooled in the summer.

Hours of work for both men and women were shorter in the United States than in most other nations in 1900. Women in Africa and Asia still spent two hours a day pounding husks off wheat or rice for the family food. American women bought their flour and cornmeal, or the men hauled it home from the mill. Women, however, still typically worked from dawn to dusk, or even longer by the light of oil or kerosene lamps. Caring for sick children lengthened those hours further. Charlotte Gilman, an early feminist leader, declared that cooking and care of the kitchen alone took forty-two hours a week. Early budget studies are consistent with that estimate. Men, too, worked dawn to dusk on the farm, and in most nonfarm jobs (about 60 percent of the total), men worked ten hours a day, six days a week.

By 1981 (the latest date available), women's kitchen work had been cut about twenty hours a week, according to national time-budget studies from Michigan's Institute of Survey Research. That reduction came about because families bought more restaurant meals, more canned, frozen, and prepared foods, and acquired an arsenal of electric appliances. Women also spent fewer hours washing and ironing clothes and cleaning house. Fewer hours of work in the home had little impact on women's labor force participation rate until the great increase after 1950.

Men's work hours were cut in half during the twentieth century. That decline reflected a cut of more than twenty hours in the scheduled work week. It also reflected the fact that paid vacations—almost nonexistent in 1900—had spread, and paid holidays multiplied.

In addition, the percentage of the labor force in the worst jobs has declined dramatically. Common laborers in most societies face the most arduous, dangerous, and distasteful working conditions. Their share of the U.S. labor force fell from about 30 percent to 5 percent between 1900 and 1990. Thousands of men in 1900 spent their lives shoveling coal into furnaces to power steam engines. Less than 5 percent of factory power came from electric motors. By 1990 nearly all these furnaces, and men, had been replaced—first by mechanical stokers and then by oil burners and electric motors. Tens of thousands of other men in 1900 laid railroad track and ties, shifting them by brute force, or shoveled tons of coal and grain into gondola cars and ships' holds. They too have given way to machines or now use heavy machinery to ease their toil.

The largest group of common laborers in 1900 was the men, women, and children who cultivated and harvested crops by hand (e.g., cotton, corn, beets, potatoes). Most blacks and many Asian and Mexican-American workers did so. These millions were eventually replaced by a much smaller group, generally using motorized equipment. New machinery also eased the lot of those who once spent their lives shoveling fertilizer, mixing cement, working in glue-works, carrying bundles of rags, waste paper, or finished clothing, and tanning hides.

Such tasks remain a miserable fact of life in many societies. But the expanding U.S. economy forced improvement as workers got the choice of better jobs on factory assembly lines, in warehouses, and in service establishments. Producers increasingly had to replace departing common labor with machinery. They substituted machinery for labor across the board. (Computer software even replaced some bank vice presidents.) But many more men who labored at difficult and boring jobs were replaced by machines tended by semiskilled workers. Between 1900 and 1990 the amount of capital equipment used by the typical American worked rose about 150 percent, taking all industries together.

Wages

Rock singers, movie stars, athletes, and CEOs stand at one end of the income distribution. At the other end are part-time workers and many of the unemployed. The differences in annual earnings only partly reflect hourly wages. They also reflect differences in how many hours a year workers spend on the job.

Thanks to increased income tax rates since 1936, today's workers attempt to reduce taxes by converting their earnings into other, nontaxable forms of income. Why use after-tax income to pay for medical care if you can get it as an untaxed fringe benefit? Why pay for the full cost of lunch if the company can subsidize meals at work? The proliferation of such "receipts in kind" has made it increasingly difficult to make meaningful comparisons of the distribution of income over time or of earnings in different social and occupational groups.

Comparing money wages over time thus offers only a partial view of what has happened to worker incomes. But what do the simple overall figures for earnings by the typical worker (before tax and ignoring "in kind" allowances) show? Table 1 reports how the average wage for nonfarm workers rose during this century. By 1980 real earnings of American nonfarm workers were about four times as great as in 1900. Government taxes took away an increasing share of the worker's paycheck. What remained, however, helped transform the American standard of living. In 1900 only a handful earned enough to enjoy such expensive luxuries as piped water, hot water, indoor toilets, electricity, and separate rooms for each child. But by 1990 workers' earnings had made such items commonplace. Moreover, most Americans now have radios, TVs, automobiles, and medical care that no millionaire in 1900 could possibly have obtained.

TABLE 1

Nonfarm Employees Annual Earnings, 1900-80

Real earnings (1914 dollars)

Real earnings (1914 dollars)

Year

Money Earnings When Employed (dollars)

After Deduction for Unemployment (dollars)

When Employed (dollars)

Consumer Price Index (1914 = 100)

Year

Money Earnings When Employed (dollars)

After Deduction for Unemployment (dollars)

When Employed (dollars)

Consumer Price Index (1914 = 100)

1900

483

523

573

84.3

1940

1,438

812

1,032

139.4

1901

497

546

582

85.4

1941

1,593

931

1,088

146.4

1902

528

583

612

86.3

1942

1,877

1,080

1,159

162.0

1903

534

575

607

88.0

1943

2,190

1,239

1,273

172.0

1904

538

555

606

88.8

1944

2,370

1,331

1,354

175.0

1905

550

582

621

88.5

1945

2,460

1,338

1,375

179.0

1906

566

618

627

90.2

1946

2,575

1,253

1,326

194.2

1907

592

613

631

93.8

1947

2,802

1,194

1,262

222.1

1908

577

545

631

91.5

1948

3,067

1,216

1,281

239.4

1909

600

604

657

91.3

1949

3,088

1,190

1,303

237.0

1910

634

608

669

94.7

1950

3,276

1,272

1,368

239.4

1911

644

612

676

95.2

1951

3,560

1,317

1,378

258.3

1912

657

619

676

97.2

1952

3,777

1,375

1,431

263.9

1913

687

649

695

98.9

1953

3,986

1,442

1,499

265.9

1914

696

613

696

100.0

1954

4,110

1,427

1,538

267.3

1915

692

591

684

101.1

1955

4,318

1,529

1,621

266.3

1916

760

649

699

108.7

1956

4,557

1,597

1,686

270.3

1917

866

681

704

127.7

1957

4,764

1,608

1,702

279.9

1918

1,063

694

709

150.0

1958

4,956

1,574

1,724

287.5

1919

1,215

681

704

172.5

1959

5,217

1,674

1,800

289.8

1920

1,426

672

714

199.7

1960

5,402

1,706

1,834

294.5

1921

1,330

620

747

178.1

1961

5,584

1,719

1,877

297.5

1922

1,289

688

772

166.9

1962

5,829

1,804

1,938

300.8

1923

1,376

774

811

169.7

1963

6,045

1,847

1,986

304.4

1924

1,396

754

820

170.3

1964

6,327

1,921

2,052

308.4

1925

1,420

764

812

174.8

1965

6,535

1,968

2,083

313.7

1926

1,452

801

824

176.2

1966

6,860

2,028

2,126

322.7

1927

1,487

810

861

172.8

1967

7,156

2,058

2,155

332.0

1928

1,490

816

872

170.9

1968

7,675

2,126

2,219

345.9

1929

1,534

853

901

170.3

1969

8,277

2,165

2,257

364.5

1930

1,495

773

901

166.0

1970

8,821

2,155

2,285

386.1

1931

1,408

696

930

151.4

1971

9,423

2,181

2,340

402.7

1932

1,249

585

918

135.8

1972

10,066

2,265

2,420

416.0

1933

1,165

565

905

128.8

1973

10,767

2,303

2,437

441.9

1934

1,199

607

901

133.1

1974

11,632

2,521

2,372

490.4

1935

1,244

637

912

136.4

1975

12,702

2,148

2,373

535.2

1936

1,296

701

940

137.8

1976

13,727

2,216

2,425

566.1

1937

1,392

767

975

142.8

1977

14,743

2,256

2,447

602.6

1938

1,370

705

978

140.1

1978

15,847

2,279

2,443

648.7

1939

1,403

760

1,016

138.1

1979

17,183

2,229

2,381

721.8

1980

18,861

2,114

2,300

820.0

SOURCE: Lebergott, 1984.

Labor Productivity

The fundamental cause of this increase in the standard of living was the increase in productivity. What caused that increase? The tremendous changes in Korea, Hong Kong, and Singapore since World War II demonstrate how tenuous is the connection between productivity and such factors as sitting in classrooms, natural resources, previous history, or racial origins. Increased productivity depends more on national attitudes and on free markets, in the United States as in Hong Kong and Singapore.

Output per hour worked in the United States, which already led the world in 1900, tripled from 1900 to 1990. Companies competed away much of that cost savings via lower prices, thus benefiting consumers. (Nearly all of these consumers, of course, were in workers' families.) Workers also benefited directly from higher wages on the job.

The U.S. record for working conditions and real wages reveals impressive and significant advances, greater than in many other nations. But the quest for still higher wages and for less effort and boredom shows no sign of halting.

About the Author

Stanley Lebergott is an emeritus professor of economics at Wesleyan University in Middletown, Connecticut. He was previously an economist with the U.S. Bureau of the Budget and the U.S. Department of Labor. He was a member of the President's Commission on Federal Statistics in 1971 and president of the Economic History Association in 1984.

Further Reading

Goldin, Claudia. "The Work and Wages of Single Women, 1870-1920." Journal of Economic History 41 (1980): 81-89.

Lebergott, Stanley. The American Economy: Income, Wealth, and Want. 1976.

The cuneiform inscription in the Liberty Fund logo is the earliest-known written appearance of the word "freedom" (amagi), or "liberty." It is taken from a clay document written about 2300 B.C. in the Sumerian city-state of Lagash.